mature and fully establish such plan as you may deem it proper for you, conjointly with the bank, to adopt. In the event that the banks of the west generally, should not resume, it may be necessary, for the best interests of our state, that a similar policy, on our part, be also, in self-defence, adopted.

Fearful that I have already extended these remarks further than propriety might seem to warrant, I respectfully commit the whole subject to you; and with the recommendation, that if adequate security can be given to guaranty the state against all ultimate pecuniary loss, an arrangement be entered into in accordance with the principles contained in the second or third of the plans proposed.

I further respectfully solicit, that the documents and this communication, be considered as for the use of both houses. WILLIAM WOODBRIDGE.

Executive Office, February 6, 1841.

Bank of Michigan, Detroit, Feb. 2, 1841.

His excellency WILLIAM WOODBRIDGE:

SIR-The relation which the Bank of Michigan sustains to the state, seems to render it proper that I should communicate to you the decision of the board of directors in regard to the resumption of specie payments. I should have had the honor of addressing you upon this subject at an earlier period, but for an unexpected detention away from home upon the business of the bank.

When the act of 20th March last was passed, the directors of the Bank of Michigan had very little doubt that before the time therein fixed for resumption, the bank would so have strengthened itself by collections from its debtors, as to be enabled to meet with promptitude all its obligations in the legal currency of the country. But in this they have been disap pointed. The amount of currency of all descriptions, in circulation, has been barely sufficient for the payment of taxes and the transportation to market of a portion of the surplus produce of the state. No exchangeable value has been found for other property, and, consequently, in most cases, where the experiment of enforcing collection has been tried, the bank has been compelled to become the purchaser of the real estate of the debtor, and wait two years to enable him to redeem the same, if it shall be his interest so to do.

This resource having failed, the directors applied to the eastern stockholders for aid. Those gentlemen who, in the previous year, had generously advanced two hundred thousand dollars, taking therefor the debts due to the bank, and extending the time of payment to the several debtors for three years,

again advancing a sum nearly sufficient for the discharge of the debt remaining due to the United States. Beyond this they have not found it convenient to go, and certainly, after what they had already done, the stockholders in Michigan, who had advanced nothing, could ask no more.

A serious change has recently taken place, by the death of one of their number, and they now feel willing to close their concerns in this part of the country and withdraw their capital. At the same time, their interests as creditors to a very large amount, is so identified with that of the state, that they would gladly unite in any practicable plan for sustaining and improving the currency, and promoting the prosperity of her citizens.

In order to lay before you their views on this subject, I have the honor to inclose herein, the copy of a letter addressed in my absence, by one of their number, to the vice-president of the bank. This communication was evidently not intended for a formal proposition, but the importance of the occasion will be an apology to the writer for making known in this manner, his wise, comprehensive and liberal views.

It may not be considered impertinent to the subject to state, that I have received information from an undoubted source, that the banks in the neighboring states of Ohio, Indiana, and Kentucky, (including western Virginia,) have determined not to resume specie payments at present, and the public prints contain a report that the Illinois bank, which resumed in December last, has again suspended. The utter impracticability of the Michigan banks maintaining specie payments, under such circumstances, will be apparent to every one who bestows a thought upon the laws of trade.

The true question seems to be, not whether the banks have a right to suspend the payment of their obligations in coin, at pleasure, for no one is found bold enough to advance such a doctrine, but finding them embarrassed by too extended loans, and not doubting their solvency, whether it is better to coerce them into liquidation, regardless of the immediate loss to the bill holder, and the general depreciation in the value of property, or to give them further time to effect the collection of their debts, and to prepare for uniting with the banks in the surrounding states, whenever general resumption may be found practicable.

The Bank of Michigan will cheerfully acquiesce in the decision of the legislature upon this subject.

I am sir, with great respect,

Your most obedient servant,

C. C. TROWBRIDGE, President.

(Copy.)

Rochester, N. Y., January 20, 1841.

DE GARMO JONES, Esq.:

DEAR SIR-I feel so deep an interest in the pecuniary affairs of Michigan, that I write you a third letter upon the subject, to present my views more in detail.

Nothing can be more important to the state, than the restoration of a sound currency; and it is equally important to our private interest, and the interest of every owner of property, and of every creditor and debtor in the state. A good bank, well conducted, is the best mode of effecting this object, and also of furnishing the means of purchasing and transporting the produce of the state. To accomplish these two objects, a great effort and some sacrifice may be necessary on the part of the state and of us, and it ought to be willingly made. A deranged currency, united with the great difficulty, which in that case must exist, of procuring money, must depress the price of all produce, and of lands, and render collections and payments next to impossible. A depreciation of ten per cent upon, say, forty millions, the real and personal property of the state, is four millions. In all the ramifications, of the results upon every species of property, and of the prospective advancement of the state, this is but a portion of the consequences, This is, in my view, the most important object for the legisla tive action of the state, and the crisis has now come, in which some definite plan should be adopted. There is no probability that individuals will establish a good bank in Michigan, and if such a bank is established, which is not only important but necessary to the well being of the state, it must be by its aid extended in some form. Several projects have been considered, as connected with the bank of Michigan, the object of which is to make a sound bank, with the power of loaning amounts sufficient to aid the purchase of the produce. The first is,

That the eastern stockholders should sell to the Bank of Michigan three hundred thousand dollars of its stock, at eightysix per cent, and recieve in payment two hundred and fiftyeight thousand dollars, in debts due the bank, but not immediately collectable. The state should then purchase the three hundred thousand of the Bank of Michigan, and issue for it three hundred thousand of state stock, and for this three hundred thousand of state stock, the eastern stockholders would place three hundred thousand, in specie or its equivalent to the credit of the Bank of Michigan. By this operation between the state and the stockholders at the east, there would be a gain of forty-two thousand, the difference between two hundred and fifty-eight thousand received, and the three hundred thousand paid. This gain would be for the benefit of the two [H. R.] Vol. II. 14

hundred thousand of stock held by stockholders in Michigan. As the operation would be for their benefit, it would perhaps be right to reduce their stock, say twenty-five or thirty per cent, which would leave a strong bank of, say four hundred and fifty thousand capital, three hundred thousand of which would belong to the state and one hundred and fifty thousand to individuals.

2d. Increase the capital of the bank three hundred thousand, making it eight hundred thousand. The state to issue five hun dred thousand of its stock, and deliver it to the eastern stockholders, for which the eastern stockholders will pay three hundred thousand in specie and two hundred thousand in Bank of Michigan stock. In this case some reduction in the amount of the remaining stock might be equitable.

3d. The state to lend three hundred and fifty thousand of its six per cent stock to the Bank of Michigan, and take its guaranty to pay the principal and interest of the same, or of returning the same amount of stock to the state, if more convenient. In this case, the bank would remain in the hands of the present holders.

The eastern stockholders, having been for many years without any dividend, and having been constantly called on to advance, until their advances amount to two hundred and eighty thousand dollars, (nearly equal to the whole amount of their stock,) feel exhausted. In addition to this, the death of the heaviest stockholder, and the division of his estate, has changed both our relative position and ability. We also, who have heretofore been efficient, are advancing in age, and desirous of simplifying and reducing our concerns. On these, and on many other accounts, we are very desirous of withdrawing. This will be accomplished, if the first proposal is received, and partially, if the second. If the third should be adopted, we should remain for the present at least, in the former position. We should get the greatest possible amount for the stock. Every dollar would go to strengthen the bank. Our object would be to discount produce paper almost alone. If the state should lend the stock, and then compel a resumption of specie payments, now, or at any time before the surrounding states resume, though it would empty the bank and the state of specie, the bank would pay dollar for dollar, and no one suffer by delay, and its debts would be appropriated to the payment of the principal and interest of the loan.

A good bank is necessary for Michigan. An issue of a half million or more of stock is not to be regarded, compared with the evils of a ruined currency, and the banks, for all practicable purposes, prostrated. If an entire new bank can be made, we shall not object to go into liquidation, and after paying the public as soon as we can, to the last farthing, take what re

mains. But in this case, a good bank is still necessary, for the public and for us. If a new bank cannot be constituted, nothing remains but to do the best possible thing with the banks now existing. Let a committee be appointed to examine the state of the Bank of Michigan, and report. If the present state of things can remain until some project can be ripened, and the currency maintained, and whenever the surrounding states entirely resume, be restored to a specie basis, a foundation is laid for the permanent prosperity of Michigan. If, on the other hand, while other states remain in suspension, the state of Michigan compels us to resume, we must go into liquidation, and paying every body within such a time as circumstances admit, must withdraw what remains. A resumption now, would drain the state of every dollar of specie and eastern funds which were accessible, cut up by the roots all the specie paying circulation, and fill it with the inconvertible money of other states.

I have had full and frequent conversation with Mr. Trowbridge, who knows also the views and feelings of us all. I have requested him, as he returns in a few days, to act for us, and feel confident that his arrangements will be ratified by all the stockholders, though I have not the opportunity of consulting them. Not having this opportunity, nor of ascertaining whether Michigan state stock can be converted to cash at any reasonable loss, you must receive this letter as the evidence of my sincere intention of carrying my views into full effect, but of course subject to such contingency as I trust will

not occur.

Respectfully, your friend,

HENRY DWIGHT.

[No. 37.]

Report of the commissioners appointed by the legislature, to settle with the Michigan state bank.

Detroit, February 8, 1841.

To the Speaker of the House of Representatives:

SIR-The undersigned commissioners, appointed by the act of February 1, 1840, to settle with the Michigan state bank, have the honor to report:

In obedience to the resolution of the house of representatives, of the 2d instant; that soon after the adjournment of the last legislature, we proceeded to examine into the condition of